Hurray! The Result is In.

Politics

 A house divided cannot stand

  Political Economy

The election results are in! California Proposition 22 won by an overwhelming margin. The status quo perdures!

 Background. The Republican Party was founded (1854) as the party of "Free Labor." What this meant was that workers should be free to freely enter into such contracts of employment as were offered to them by employers. In other words, it meant an un-regulated labor market which, as it just so happens, suited employers just fine.

The country then fought a war to get rid of slave labor.

With the Republican Party in ascendance, the country entered the era of unregulated capitalism which culminated in Lochner v. New York (1905) in which the Supreme Court held that the right of contractual liberty was constitutionally sacrosanct. This meant that it was unconstitutional for government to pass health and safety laws regulating work conditions; i.e. "dictating" the terms of a contract of employment.

If a child contracted to work 14 hours a day for a pittance far be it from us to infringe on his constitutional rights to freely contract his labor!

If a woman lost her hand in a machine loom she had, after all, "assumed the risk" entailed in the work. If she was worried about her hands she ought to have freely contracted another type of employment.

If "workers's syndicates" attempted to collectively bargain for wages and working conditions that was not only unconstitutional but an "illegal combine" as well!

Our Supreme Court at work.

And so, when it came to social safety nets and economic regulation the United States lagged behind the Second Reich, the Weimar Republic and even the Nazis until, at last, Roosevelt decided to do something about it, beginning with a federal statute aimed at preventing sick chickens from being sold as wholesome fryers. As a side dish, the statute also regulated hours and working conditions. In what became known as the Sick Chicken Case, the Supreme Court struck the statute. "Tell the president," liberal Justice Brandeis said, "that we're not going to let the government centralize everything."

To the sacrosanctness of contract, the high court now added the sacrosanctness of states rights and separation of powers. Two years later, after threats from the president, the Supreme Court made the "switch in time that saved nine." In NLRB v. Jones etc. (1937) it upheld the right of unions to organize and collectively bargain for wages and working conditions. "That," the Court now intoned" "is a fundamental right."

That same year the Court upheld the Social Security Act, and with that, America's era of pseudo-social democracy began. "Pseudo," because New Deal and post-war social legislation was never as comprehensive or as fundamentally grounded as systems in Europe. It has, for example, never been held in this country that health care is a basic human right integral to the social contract itself. Health care for All Seniors has only been upheld as a matter of statutory policy. Medicare could be repealed tomorrow if the party of Savage Capital put their minds to it.

But they have put their minds to destroying as much of the New Deal as possible, beginning in 1980 with Reagan's crusade gainst unions and with the initiation of what is known as the Gig Economy.

The Gig Economy is nothing less than the return to Free Labor (1854) and Lochner (1905). Only the labels have changed. "Illegal combines" are now replaced with a so-called "Right to Work." What was called a free laborer is now called an independent contractor. An employer can (in the exercises of its constitutional right of contract) choose to employ someone as an employee in which case the latter will be entitled to all the employer-paid benefits the law requires (thanks to Roosevelt and his dead chickens). On the other hand, the employer can, if he, she or it so wants, chose to have his work done by independent contractors in which case they are owed nothing except the "fee" freely negotiated. The result was predictable.

Both government and capital chose the better bottom line meaning that millions in the work force lost unemployment health and retirement benefts. Fuck em! Let em scramble. It's the Murkan Way.

Since, in such a system, wages sink to the lowest possible level, the "independent contractor" simply has no wherewithal to save for rainy days, to pay market rate insurance premiums, to accumulate down payments, or to save for retirement. Let us take a very simple example. An independent contractor must pay 14% of his income toward social security. That's a hefty amount. An employee will pay 7% of his wages toward social security and his employer will pay a matching 7%. The employee now has an extra 7% of income which he can use to buy a home or to invest in a 401k. He gets the present value of 21% without even taking into account the appreciation of assets. If the value of group medical insurance as against individual free market insurance is factored in he comes out further ahead just as the independent contractor is even more fucked.

The ultimate social cost is also predictable: more and more independent contractors are simply unable to withstand the viscitudes of the market place and fall through the proverbial "cracks" and into the sadomasochist world of "welfare." Just as civil law aims to oppress the poor, welfare aims to humiliate them -- to see just much abject compliance and denigration can be extracted at minimum cost.

Much to anyone's surprise, the California Supreme Court -- a sadistic and reactionary institution if ever there was one -- ruled last year that if an independent contractor was to all intents and purposes an employee he had to be given the full basket of benefits to which an employees were entitled. This ruling was then codified into law (2019) by the Legislature.

This is what Franklin Roosevelt called "stepping on toes" and the usual howl of pain and anguish pierced the skies. App-based companies DoorDash, InstaCart, Lyft, and Uber, initiated Proposition 22 aimed at overturning the law. Together they spent $202 million dollars to back the proposition, making it the most money ever spent on an initiative.

And with success. Prop. 22 was passed by almost 60% of the votes. At the same time, Biden garnered 65% of the vote.

So what does that tell you? It tells me that this wonderful "Blue State" -- firmly in the grip of the liberal Demorat Party is about as progressive as 1840 and 1905 Republicans Biden or no Biden.

Gentrified Liberals will raise their usual sanctimonious prattle. Oh but we believe in Freedom of Fetus Flushing! We support Queer Cakes! Black lives Matter to Us as much as our own (almost)! And of course we believe in equal access to this and that. A level multi-cultural playing field for all! Anyone can get into Stanford if they just put their mind to it, like we did!

But none of these cultural and access issues are worth a damn unless they are predicated on a fair and sustainable economic social contract. That is, unless everyone commits to paying his share of another's wellbeing. Yes -- his share of another's. That's the real meaning of community. That's the real meaning of social democracy. But just as much as Republicans, liberal, blue Democrats fail to put any money where their mouth is and the passage of Proposition 22 proves it.

In favor of the proposition, the usual excuses are blathered. A free-wage market will incentivize investment, yield increased productivity and happiness all around. But "productivity" is just happy talk for "profit" since the whole point of a product is to sell it and make a profit from it. So what the blather boils down to is: the independent contractor's loss will be the "non-employer's" gain.

 California is a solid "blue" state. It is also bellweather state. The passage of Prop. 22 tells me one thing: there will be no economic justice under Democrat rule than under Republican. It's all just a lot of stuff and nonsense for the comfortable to anguish over.

Politics 

(again)

Yes, a house divided cannot stand and, as appears likely, the intractable division between Red and Blue will remain reflected in an utterly deadlocked government. This acutally suits the wealthy just fine because the less government can do, the less it regulates and the more Liberty of Contract there will be. Hurray for Lochner!

 But the house remains divided in a more fundamental and ultimately disastrous way. It remains divided between the haves and the have-nots. Between upper middle class, who are the happy vasssala of a system which coddles and provides for them and the truly independent poor who are left to sink on their own. Vive la Liberté. 

 © 2020

Footnote on Lochner

Lochner illustrates how caselaw works. The issue in the case was whether New York could regulate work conditions for bakers on health and safety grounds. Lochner never said that it could not. What it said was that baking was a piece of cake that did not involve any health risks at all. Thus, to interfere with contracts (aka regulate working conditions) for no good reason was obnoxious to the constitution. Why, it was just gub'mint as busybody.

As the dissent pointed out in gruesome detail, baking is a highly health endangering condition, particularly to the lungs. The average life span of a baker was 45 to 50 years. There was a more than enough health and safety regulation to warrant to "interference" with contract.

But, by ignoring a fact, the Court was able to set an abstract principle and then, in subsequent cases, use that abstract princple to dismiss the facts in the cases as constitutionally irrelevant or insignificant. "As we said in Lochner..." etc.